The Japanese employment system

Seminar paper from the year 2006 in the subject Sociology - Work, Profession, Education, Organisation, grade: 1,7, University of Osnabrück, course: Economical and Technical Development and Organisation, WS 05/06, language: English, abstract: After Japan recovered from the disastrous defeat of World War II, its enormous economic

growth provided a series of questions to the world¿s leading economists. With constant

growth rates over 11% on average in the 1960s, Japan had the world¿s second largest

GDP.

Seeking explanations and reasons for this phenomenon, soon a couple of important

influences on the Japanese economy were found. The increased demands on Japanese

products during the conflicts in Vietnam after the Second World War (which led to the

Vietnam War 1964-1973) and the Korean War 1950 to 1953 as well as the government aid

for selected industries and protective duty accelerated its growth, which exceeded all

former expectations1.

Another important element of the Japanese prosperity was met with the Japanese-style

employment system2. What would primarily influence the image of the Japanese to the

further decades, the industrious, never sleeping blue-collar and white-collar workers,

fulfilling a life for the company in a state of mutual dependence, is the result of an

elaborate employment system.

And in fact, lifetime employment, a predetermined career path and the seniority-based

wage system were established to commit the regular workers to "their¿ company, while the

temporary workers still did not reach a similar status.

This "Japanese Model¿, as several authors call it, is subject to constant change. Even

though the system was never fixed, it changed its surface not before the "collapse of the

bubble¿ in 1990.

Shortly after this prolonged economic recession, which forced every industrialised country

to undertake economic restructuring, Japan was able to recover very fast through strict

rationalisation and a revision of its employment system. Today, Japan has changed. Still the second largest economy of the world, it has to

confront an economic growth close to 2%. With this comes a call for a more flexible

employment system which still has to pay the regular workers who many years ago were

attracted with the seniority-based wage system reflecting the workers higher needs in

subsequent years. Furthermore, the new generation of workers is organised in unions and

knows their value to the market, and would not agree earning half the sum a senescent

worker does.